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Consumer Spending - From the experts at Harvard

Discussion in 'Political Discussion' started by PatriotsReign, Dec 9, 2009.

  1. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    I thought this article was pretty interesting;

    HARVARD BUSINESS SCHOOL FACULTY SHARE PERSPECTIVES ON HOLIDAY CONSUMER SPENDING

    "If we start with the big picture, holiday retail spending in 2009 is likely to be flat or marginally better than last year. In 2008, holiday retail sales were $442 billion or about one tenth of total retail sales for the year. While this year is likely to see little or no increase on 2008 holiday sales, the difference, year-over-year, is expected to be much smaller than the 3.4% drop in holiday spending last year-relative to 2007-when consumers pulled back dramatically on all manner of buying in the midst of the financial crisis.

    On the demand side of the economy, consumers face several headwinds as they embark on their holiday shopping journeys, including uncertainty about jobs, housing values, the availability of credit, and the stock market. Even more important, consumers' attitudes about getting and spending and how they deal with household budgets are undergoing a huge shift, the biggest shift since the end of the Great Depression and World War II. And this change will likely play a role not only this holiday season but for years to come. After the shock and awe of last year's financial crisis, households are taking stock, abandoning the "next new thing" in favor of more enduring priorities, and establishing distinct notions of value from those that have prevailed during the last decade. All of this adds up to the New Normal."


    Frugality is here to stay.
     
    Last edited: Dec 9, 2009
  2. apple strudel

    apple strudel Banned

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    These things tend to be cyclical, no?
     
  3. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    Yes and no. Yes, the economy goes in cycles and No, the ways of the recent past will not return for decades.

    The current economic crisis is having an impact upon the psyche of all Americans just like the Great Depression had upon the generations that lived through it.

    My parents lived through the great depression and they are STILL frugal. When/if this is over, people will not say, "glad that was over, but we have recessions every so often and it's going to go back to the way it was before". They're goint to say, "Thank God we made it through! I'm never going to get myself in that kind of debt ever again! I'm going to be prepared the next time so I need to build savings".

    People like you & I will never forget this recession. It's the grandaddy of all recessions in American history.

    Sadly, it's not going to go back to the way it was before. Because the way it was before was a BUBBLE and bubbles are economic pandemics. That's why we don't want our gov't to make home buying easy again.
     
    Last edited: Dec 9, 2009
  4. apple strudel

    apple strudel Banned

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    In one sense I hope you're right, but in another I understand that consumerism is deeply ingrained in American consciousness.
     
  5. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    Good point! And I agree with what you wrote above. But keep in mind that FEAR is the single strongest influence upon human behavior...it's much stronger than greed (in most humans).

    Let's consider our own behavior. I was going to buy a house 2 years ago and I still haven't purchased one. And it's not because prices have been going down as much as I'm concerned about the future. I've also become far more conscious of what I'm spending and how I invest my 401k.

    Since I believe it's going to take us years to finally get out of this mess, this affect will probably increase and become more & more ingrained in my psyche...as it will with most Americans.
     
    Last edited: Dec 9, 2009
  6. DarrylS

    DarrylS PatsFans.com Supporter PatsFans.com Supporter

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    Frugality is a very good thing.. but doubt if it will really remain a reality or is just a reflection of the times..
     
  7. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    That's a very question. I think it will all depend on how long this very depressed economy lasts.
     
  8. DarrylS

    DarrylS PatsFans.com Supporter PatsFans.com Supporter

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    Anecdotally our spending habits have changed.. but they have been evolving to a less material world for a while now.. too much stuff.
     
  9. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    It was all part of that stupid race to have the most, the biggest and best. What a waste of time & money!
     

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